Are you burdened with debt? Here’s an easy way to find out

The increase in key interest rates announced yesterday by the US Federal Reserve, inflation, and rising gas prices directly affect Quebec’s governors.

Statistics Canada reported last March that the Canadian household debt ratio had reached record levels.

Should we be more concerned about the current economic situation if we have too many debts? For evaluation, you have to calculate your debt ratio.

“In order to determine whether we are close to over-indebtedness, there is a debt ratio that exists which makes it possible to determine whether we are over-indebted,” explains Sophie Desautiles, a licensed insolvency will at Raymond Chabot.

However, he is reassuring: some debts are not worrisome.

“A mortgage is a good debt. The problem is when our debt is greater than we can repay. So the debt ratio makes it possible to calculate our disposable income and our debt,” she explains in an interview with TVA Medi.

This ratio gives a clear picture of your personal finances.

The ratio we should set is the 40% debt ratio. If we exceed that, it means that our budget is very tight. Our situation will depend on whether we have a family, whether we are alone, or single…”

Thus several factors must be taken into account in the calculation.

To calculate this ratio, we must take all the monthly payments, add them up and divide them by the gross monthly income, i.e. before taxes.

“We take our annual gross income and divide it by twelve. Family allowances are also added. Then we take the amount of our debts and divide it by our monthly income.

If you can no longer afford your basic expenses without using your credit cards, this is a harbinger of excessive indebtedness.

“Pharmacy or food charges are a big sign if you put it on the credit card and you can’t pay it before the end of the month. It’s a clear sign. If you pay off the credit card by paying with a credit card, you have to see that there, things are not going well. ‘, she insists.

“If you start getting calls from a creditor, don’t wait. There are solutions, there are people for it and there is life after financial recovery.”